Government needs to listen and pause the roll out of Universal Credit says Usdaw

Date: 19 October 2017Shopworkers’ trade union leader John Hannett is urging the Government to listen and pause the roll out of Universal Credit (UC), after last night’s humiliating defeat in the House of Commons on their flagship welfare policy.

Usdaw is seeking three fundamental changes to UC that will help get the troubled project back on track to support not penalise working families:

Increase the ‘work allowance’ and reduce the ‘clawback’ to provide a genuine incentive to enter employment and progress in work.

Lower the six-week waiting time to counter unnecessary hardship.

Address the systemic problem for claimants on weekly and 4-weekly pay.

Usdaw’s analysis reveals that a couple with children, both working in retail, earning just above the so-called ‘National Living Wage’, one working full-time and one part-time, would be £1,866 a year worse off on UC. Also, a worker on UC earning £7.50 an hour, takes home just £7.55 for doing an additional 4 hour shift. That amounts to £1.89 per hour, often barely covering their travel costs.

John Hannett Usdaw General Secretary says: “We supported the initial intentions of Universal Credit, to simplify benefits and make sure people are better off in work. However, severe cost cutting has turned UC into a ticking time bomb that will leave millions of working families thousands of pounds worse-off when they are transferred onto it. The Government now needs to halt the roll-out, instigate a review and restore the original purpose of UC, to encourage entry to and progression in work. The low work allowance and high clawback of net earnings are particular disincentives.

“There is also a particular concern for those workers who are paid every four weeks or weekly. UC assesses claimants’ monthly income, so once every year four-weekly paid workers have two pay days assessed in one month, and those who are paid weekly have 5 pay days assessed instead of 4. When this happens, claimants often do not qualify for any UC payment in that month so they lose their entitlement and have to reapply.

“It is an unnecessary hardship caused by a simple failure to understand the pay arrangements of many low-paid workers. Most major retailers pay their staff every four weeks, giving them 13 pay days a year, and there are still many weekly paid workers, particularly in small and medium sized enterprises.

“The Prime Minister has talked about helping families who find it difficult to make ends meet, but we have seen no progress and in fact many working people are becoming worse-off. With the cost of living rising, working families need the Government to change course and provide the support they need.”

Notes for editors:

Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fifth biggest trade union with over 430,000 members. Membership has increased by more than 20% in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.